Crude Oil Outlook: Volatile Range Continues as Uncertainty Persists
Crude oil prices have remained volatile in recent weeks, influenced by mixed global cues, shifting demand sentiment, and changing geopolitical expectations. While crude futures on the Intercontinental Exchange have shown weakness, domestic MCX crude contracts have shown short-term strength. This unusual divergence indicates confusion, caution, and indecision in the broader energy market.
Understanding the price action in oil is crucial because crude is a major contributor to inflation, fuel pricing policies, logistics costs, and corporate profitability—especially in India where global prices heavily influence domestic retail and wholesale fuel trends. Therefore, even traders who are not trading crude should stay aware of its broader impact on equity sentiment, inflation expectations, and currency movement.
Recent Price Action: Mixed Signals Continue
On the global front, Brent crude has been trading between $61.50 and $63 per barrel, indicating a tight consolidation zone. On the domestic MCX platform, crude futures closed near ₹5,324, which reflects short-term upward momentum from key technical zones.
Interestingly, the USD has strengthened in the last few sessions, and historically, a stronger dollar puts downward pressure on crude due to higher import cost and reduced global affordability. However, geopolitical uncertainty, production cuts by OPEC+, and fluctuating inventory data are preventing a sharp correction and adding unpredictability to the price structure.
Technical Outlook: Tight Battle Between Bulls and Bears
Brent crude has found support levels near $61.50 and $60.50, while resistance remains visibly strong at $63 and $64. Until either side breaks decisively, the range-bound price movement is expected to continue.
On MCX, price action is reacting strongly around the ₹5,360 zone, where the 50-day moving average aligns with a trendline barrier. A breakout above this level may trigger short covering and encourage fresh long positions. However, until then, caution remains the more sensible approach.
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Support and Resistance Zones to Watch
Resistance: ₹5,360 → ₹5,500
Support: ₹5,150 → ₹5,000
Only a breakout above ₹5,500 will turn the short-term outlook bullish. Similarly, a break below ₹5,150 may trigger deeper correction toward ₹5,000.
Trading Strategy: Stay Patient Until Breakout
Suggested Strategy
- Buy crude oil futures only if price breaks and sustains above ₹5,500.
- Initial stop-loss: ₹5,360.
- Target levels: ₹5,650 → ₹5,750.
Since volatility is expected to rise near these key levels, disciplined stop-loss usage is essential. Traders should avoid emotional reactions and avoid attempting to predict breakouts prematurely.
Investor Takeaway
The crude oil market continues to remain uncertain and range-bound with no clear breakout in sight. While fundamentals such as inflation, production discipline from producers, and geopolitical tensions support prices, weakening demand and strengthening currency pressures are creating a tug-of-war scenario. The smartest approach now is to maintain patience and trade only when a confirmed technical breakout or breakdown occurs.
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SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
